Are You Ready to Ruuuuuummmmmbbbble!
In this corner, the reigning champion of the last 50 years; the National Association of Realtors, and their co-conspirators; Home Services of America, RE/MAX Holdings, Keller Williams Realty, and Realogy Holdings. And in the other corner, hailing from Shorewood Minnesota, Christopher Moehrl.
His name does top the Class Action, but the lawsuit represents everyone in the United States over the last five years who bought or sold a home through any of the co-conspirators. That’s a lot of people! And, representing all those people are a dream team, league of law firms with epic track records.
Cohen Milstein Sellers & Toll, and Hagens Berman Sobol Shapiro are just two of the five law firms who have banded together for this complaint. These are the same firms who took on big tobacco to the tune of $206 billion dollars. They beat Volkswagen for their emissions. They beat Apple over their monopoly on the e-book market. The point is, these guys don’t mess around and they are by FAR the biggest legal threat NAR has ever faced.
The reason why these five law firms have teamed up? To allege the industry’s 6% commission rate amounts to collusion and a violation of federal anti-trust laws. The lawsuit is finally addressing the third-rail of our industry; paying the buyer’s agent. To which, every consumer, ever sighed; “about friggin time”.
NAR on the other hand says; “the complaint is baseless and contains an abundance of false claims”. Nobody expected NAR to roll over. It isn’t their style. But, many question if stupid is their best stance. They’re not up against the usual ambulance chasers they normally see. The law firms they are facing now, don’t do, “baseless”. Their records and reputations were not made on false claims. This makes NARs position of discounting the complaint out of hand look both desperate and silly.
Since the original complaint was filed in March, two more, nearly identical, lawsuits have been filed. Lawyers are smelling blood in the water. Look for additional complaints along with coordinated national efforts to get the messaging out. How long this process will take is unknown. But look for the lawyers to milk their billable hours for at least 18 months.
No matter what side of the argument you’re on, what comes out of these proceedings will forever change the industry. The real estate norm you know now will be very different, very soon. And yes, I have been predicting big changes in this industry for over a decade. But this time, it’s different.
Anyone with a pulse over the last five years will tell you they saw this coming. Uber fighting the taxi commission. Airbnb challenging traditional hospitality. The collapse of the travel industry. The upheaval in the financial services market. These were all coming attractions for the real estate industry.
Industry expert, Rob Hahn, founder of 7DS Associates, calls these new lawsuits a, “nuclear bomb on the industry”. Glenn Kelman, CEO of Redfin was more philosophical; “scientists believe the dinosaurs were living a very marginal existence when the asteroid hit. I think the ecosystem in real estate is just as vulnerable”. Whoa dude, literally calling real estate agents “dinosaurs” is a little harsh, but his point is taken.
Sadly, over the next two years, little if anything in the local press will be written about these cases. To our knowledge, the Atlanta Journal Constitution, AJC, has never written a story about the, “business model” of residential real estate. With an endless supply of decorating and de-cluttering tips, why would they?
But, if the AJC were to ever consider an article about the very unique nature of the Atlanta real estate market, they would learn just how big a deal this really is. But, they won’t, so they don’t.
Spend any time reading this subject and you will learn a lot of what the rest of the nation wants, Atlanta already has! Again, Mr Kelman stated it best; “if agents aren’t incentivized to contribute to the MLS, the whole network could break down”. Atlanta is one of the few markets, and certainly the largest in the United States, that isn’t owned or run by NAR. Our agents do contribute to the MLS. Our MLS is “for profit”. Eighty seven percent of our nation’s MLS are not!
Our unique MLS makes Atlanta a one-of-a-kind market in many ways. Atlanta is the only place in America where agents can pay their Brokers as little as $9.95 a month for MLS access and never pay them more than $300.00 on any closing. Sell a $1.5M dollar home, pay the Broker $300 bucks. We take it for granted in Atlanta. Agents in California can only dream about such things.